Last month, Warren Buffett’s Berkshire Hathaway disclosed that it sold large blocks of stock in Delta Air Lines and Southwest Airlines.
In recent months, during Berkshire’s annual shareholders’ meeting, Warren Buffett said the world has changed because of the COVID-19 and that he had been wrong to invest in the airline industry. As a result, his company sold its stake in American airline companies which consisted: 11% stake in Delta Air Lines, 10% of American Airlines, 10% of Southwest Airlines, and 9% of United Airlines.
Michael Brush, a financial writer said that Buffett made a mistake when he sold his airline shares because airline executives were confident in the industry’s recovery prospects and were backing up that confidence by buying companies shares.
Even President Trump chimed in this past week. President Trump held a press conference on Friday at 10 AM to talk about the job numbers. But he also took a moment to call out Warren Buffett. He said Buffett sold the airlines a while back and although he’s been right his whole life, he made a mistake because the airline stocks went through the roof. The airlines have been on fire since Buffett sold them. On Friday, United, Delta and American Airlines were up 16.8%, 10.4% and 21%, respectively alone on Friday.
But Buffett isn’t hurting. Once upon a time, Buffett never invested in tech because he said it was hard to value tech companies early on due based on projections vs. actual cash flow. A couple of years ago, Warren started buying Apple’s stock and now owns over 150 million shares through Berkshire Hathaway Apple. Berkshire also owns over 500,000 shares of Amazon.
But the rest of the Berkshire Hathaway equity portfolio, which totaled $180 billion on March 31, has staged a nice recovery this quarter, led recently by financial stocks like Bank of America (ticker: BAC), Wells Fargo (WFC), and American Express (AXP).
Berkshire’s largest holding, Apple (AAPL), hit a record high of $331.75 on Friday and finished at $331.50, up nearly 3%. Berkshire’s Apple stake is now worth about $81 billion.
And with many U.S.-focused industrial businesses like the Burlington Northern Santa Fe railroad, Berkshire offers an economic recovery play. The company also is benefiting from better pricing in property and casualty reinsurance, where it is a major player.
Bill Ackman, billionaire hedge fund manager made a big investment in Warren Buffett's Berkshire Hathaway towards the end of 2019. Usually, when he makes an investment, he holds for years. But recently, he sold his Berkshire stake because he believes there are better reward to risk opportunities out there.
Berkshire Hathaway Inc., through its subsidiaries, engages in insurance, freight rail transportation, and utility businesses.
Berkshire Hathaway Inc., through its subsidiaries, engages in insurance, freight rail transportation, and utility businesses. Berkshire offers two different type of shares, Class A and Class B shares. Class A shares refer to a classification of common stock that is accompanied by more voting rights than Class B shares, while one Class B share may be accompanied by only one right to vote. But the biggest difference is in the stock price of each class of share. The Class A shares are currently trading north of $300,000, while the Class B shares are selling near the $200 level.
The Class B share are rallying with the overall broader market.
Thus, the chart suggests, price can move much higher and possible to the daily supply at $222 with a first target at $208.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
